What is the scope of the release provided by the Assignor in the Belocal agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- Release. Assignor, for itself and on behalf of its guarantors, predecessors, parents, affiliates, subsidiaries, shareholders, members, partners, officers, directors, managers, employees, agents, representatives, attorneys, accountants, heirs, executors, administrators, family members, successors, and assigns, and all other persons acting on their behalf or claiming under them ("Assignor Releasing Parties"), hereby release, acquit, and forever discharge Franchisor, Franchisor's predecessors, parents, subsidiaries, and affiliates, and their present and former officers, directors, shareholders, partners, managers, members, agents, representatives, independent contractors, servants, employees, attorneys, accountants, guarantors, successors, and assigns, past and present, in their corporate and individual capacities, and all persons acting by, through, under or in concert with any of them ("Released Parties"), from all claims and damages whether known or unknown, which Assignor Releasing parties, or any of them, have, had, or claim to have against Released Parties, or any of them, including but not limited to claims arising out of or relating to the performance or non-performance of the Franchise Agreement or the relationships created thereby, this Agreement, and/or any other agreement between Assignor, Assignor's Principals, and/or entity owned in whole or in part by Assignor or Assignor's Principals on the one hand and Franchisor and/or any of its affiliates on the other hand. Excepted from this release are any contractual obligations under this Agreement, which remain in full force and effect.
[INCLUDE THE FOLLOWING SENTENCE FOR TRANSFERS IN WASHINGTON ONLY: The release in this Section 5 does not apply with respect to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and the rules adopted thereunder.]
[INCLUDE IF ASSIGNOR IS A CALIFORNIA RESIDENT: Assignor Releasing Parties, and each of them, expressly waive and relinquish all rights and benefits which any of them may now have or in the future have under and by virtue of California Civil Code Section 1542. Assignor Releasing Parties do so understanding the significance and consequence of such specific waiver. Section 1542 provides that "[a] general release does not extend to claims which the creditor does not know or suspect exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." For the purpose of implementing a general release and discharge as described in this Section 5., Assignor Releasing Parties expressly acknowledge that this Agreement is intended to include in its effect, without limitation, all claims described in this Section 5., which the parties do not know or suspect to exist in their favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims.] [Include if Assignor is California resident.]
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the assignor provides a broad release to the franchisor, its predecessors, parents, subsidiaries, and affiliates, along with their present and former officers, directors, shareholders, partners, managers, members, agents, representatives, independent contractors, servants, employees, attorneys, accountants, guarantors, successors, and assigns. This release covers all claims and damages, whether known or unknown, that the assignor or related parties have or claim to have against the released parties. These claims include those arising from the Franchise Agreement's performance or non-performance, the assignment agreement itself, and any other agreements between the assignor (or their principals or entities they own) and the franchisor (or its affiliates).
However, there are exceptions to this broad release. Any contractual obligations under the assignment agreement remain in full force and effect. Additionally, for transfers involving Washington franchisees, the release does not apply to claims arising under the Washington Franchise Investment Protection Act, RCW 19.100, and its associated rules.
For assignors who are California residents, they expressly waive their rights and benefits under California Civil Code Section 1542, acknowledging they understand the significance of this waiver. This section states that a general release does not extend to claims the creditor doesn't know or suspect exist at the time of the release, which, if known, would have materially affected their settlement. The assignor acknowledges they are assuming the risk of unknown and unanticipated claims related to the Franchise Agreement and that the release applies to these claims.